Michigan businesses want to know 'am I essential or not' in shutdown

Businesses are seeking clarity on whether they qualify as "critical" to the state's infrastructure under Gov. Gretchen Whitmer's "Stay Home, Stay Safe" order. And for those companies supporting those critical operations, it can be even less clear.

"They're very confused right now," Charlie Owens, Michigan state director of the National Federation of Independent Business, said of small-business members. "We'll get a call, and they say, 'I'm doing X, am I essential or not?'"

The order Whitmer announced on Monday that was set to take effect at 12:01 a.m. Tuesday lasts through April 13, forcing non-essential businesses to close their doors. Deliberate violations could result in a misdemeanor that carries up to a $500 fine or up to 90 days in jail.

Sometimes it is unclear who qualifies and who doesn't, Owens said. "Critical infrastructure workers" as stated in the order are defined as those in the fields of health care, law enforcement, public safety, food and agriculture, energy, water and wastewater, transportation, communications, other community-based government operations, critical manufacturing, hazardous materials, financial services, chemical supply chains and defense industrial base.

Some of the organizations that fall into those categories are obvious: hospitals, utility companies, farmers and truck drivers. But for others, especially those needed to support these businesses, it's less clear.

The order allows flexibility for critical businesses to designate the suppliers, distributors and other businesses that they require to continue to functioning. Businesses must designate in writing the workers they need to perform minimum critical functions before April 1.

"That is potentially fairly broad if you are connected with a company in the 'critical infrastructure' space," said Eric Post, a partner with the corporate practice team at Varnum LLP in Grand Rapids. "Not only do suppliers and distributors of the critical infrastructure business receive an exemption, but they in turn can exempt their own distributors and suppliers. It goes up the chain."

But some businesses are looking for greater clarity on whether the order prevents them from operating.

The order refers to a guidance issued last week by the U.S. Homeland Security Department's Cybersecurity and Infrastructure Security Agency.

Read: Homeland Security's essential worker list

This guidance provides more specifics under the broader categories such as:

• Manufacturers, technicians, logistics, warehouse operators and distributors for medical equipment
• Employees of companies producing chemicals, medicines, vaccines, and other substances used by the food and agriculture industry such as fertilizers
• Employees engaged in the manufacture and maintenance of equipment and other infrastructure necessary to agricultural production and distribution
• Gas stations and truck stops and the distribution systems that support them
• Employees supporting or enabling transportation functions, including dispatchers, maintenance and repair technicians, warehouse workers, truck stop and rest area workers, and workers that maintain and inspect infrastructure

That uncertainty may extend to the auto industry, as well. Detroit's three automakers last week agreed to suspend progressively production at its manufacturing plants in North America until March 30. The order's impact on auto plants "is fluid," Ford Motor Co. spokeswoman Kelli Felker wrote in an email.

Critical manufacturing does include "workers necessary for the manufacturing of materials and products needed for ... transportation," according to the federal guidelines, though auto manufacturing is not explicitly mentioned.

The federal government's guidelines do designate "automotive repair and maintenance facilities" as critical functions. Ford's distribution centers, which are operating with paid voluntary workers, will continue to run, Felker said.

General Motors Co. and Fiat Chrysler Automobiles NV did not immediately have comment.

The Detroit Auto Dealers Association is looking for further guidance with regard to vehicle sales operations, director Rod Alberts said in a statement.

"Many factors must be considered, from end-of-lease issues and irreparable collisions requiring a replacement vehicle, to new vehicle purchases that may be needed for the health and safety workforce or increased demand for delivery services and delivery vehicles," he wrote.

The federal guidance emphasizes that its recommendations are not an exhaustive list and that local and state officials may clarify further what qualifies as critical. The state may issue additional "guidance" on which businesses can stay open in the future, said Tiffany Brown, the governor's spokeswoman.

But the exemptions are a lot to work through, Owens said: "That's not practical. Some businesses that have HR departments and people on staff that can sort through that sort of thing, but for small businesses that are in the supply chain or providing some other services, it's very difficult to do. Having clarity on contractors, laundering and dry-cleaning, hardware supply stores would be helpful here."

Other states such as Ohio have permitted such businesses in their orders. Trade groups are communicating with their members on what qualifies and what doesn't. The production and distribution of wine and beer appear to be included under exemptions for food and beverage retail, according to the Michigan Beer & Wine Wholesalers Association, while hotels and motels can remain open, says the Michigan Restaurant & Lodging Association.

The Michigan Farm Bureau also is in touch with its members, especially with the planting season expected to begin in the next two to three weeks.

"Parts and equipment all need to be in place for when the weather conditions are perfect for that particular type of commodity," said Craig Anderson, Farm Bureau manager of agriculture labor and the safety services program. "If you look at, for example, let's say refrigeration. A heating ventilation contractor may not specifically be included within an exemption, but their work is critical in terms of whether they are doing a job for a dairy operation or a medical facility."

But once a business understands that it does qualify as having critical infrastructure workers, it can designate Tier-1, 2 and 3 suppliers so they can stay in operation, said Doug Rothwell, CEO of Business Leaders for Michigan.

"That was something that was important to embed in the executive order," Rothwell said. "Grocery stores depend on produce from suppliers to operate. It's really important to have that supply chain intact."

Business leaders were glad to see that these designations can be made without prior approval from a governmental agency, they said. That will help operations to continue uninterrupted.

"The supply chain isn't held up or bottlenecked," Owens said. "Right now, that's critical because if they don’t have the revenue, they can only go so long before they have to lay off employees."

bnoble@detroitnews.com

Twitter: @BreanaCNoble

Staff Writer Kalea Hall contributed.